Price transmission in the agri-food value chain - from a farmer perspective
Publikation: Bidrag til bog/antologi/rapport › Konferencebidrag i proceedings › Forskning › fagfællebedømt
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Price transmission in the agri-food value chain - from a farmer perspective. / Hansen, Henning Otte.
Healthy agriculture for a healthy world: proceedings. red. / Heather Watson; Mathieu Lipari; Sophie Gendron; Marie-Claude Bouchard; Suzanne Couture; Nathalie Nadeau. Bind 1 Québec : International Farm Management Association, 2015. s. 129-137.Publikation: Bidrag til bog/antologi/rapport › Konferencebidrag i proceedings › Forskning › fagfællebedømt
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TY - GEN
T1 - Price transmission in the agri-food value chain - from a farmer perspective
AU - Hansen, Henning Otte
N1 - Conference code: 20
PY - 2015
Y1 - 2015
N2 - Price transmission in the agri-food value chain - when changes in one price cause another price downstream to change - is an important issue for farmers, markets and the economy as an efficient market price setting is crucial for all market players. However, there are numerous examples of price transmission in the agriculture value chain not working optimally, and there are several different forms of incompleteness and imperfection. There are a number of possible causes, but it is difficult to document on the basis of empirical data.The aim of this article is therefore to document the presence of imperfect price transmission, to determine some of the underlying causes and driving forces behind the phenomenon as well as highlight farmers’ interests, role and opportunities in connection with ensuring more effective price transmission.On the basis of an example of a grain-bread value chain, it is apparent that the price increases downstream occur relatively quickly and are significant, while the price decreases become smaller and significantly slower as one moves forward in the value chain. Both lags and asymmetric price transmission are present. The example also shows that bread prices increase far more than can be explained by the increase in the price of grain. Bread prices have, therefore, overreacted to the increase in the grain price.Farmers can move downstream in the value chain via their cooperatives and in this way contribute to the creation of improved price transmission, while at the same time, gain access to segments with higher margins and greater market power.
AB - Price transmission in the agri-food value chain - when changes in one price cause another price downstream to change - is an important issue for farmers, markets and the economy as an efficient market price setting is crucial for all market players. However, there are numerous examples of price transmission in the agriculture value chain not working optimally, and there are several different forms of incompleteness and imperfection. There are a number of possible causes, but it is difficult to document on the basis of empirical data.The aim of this article is therefore to document the presence of imperfect price transmission, to determine some of the underlying causes and driving forces behind the phenomenon as well as highlight farmers’ interests, role and opportunities in connection with ensuring more effective price transmission.On the basis of an example of a grain-bread value chain, it is apparent that the price increases downstream occur relatively quickly and are significant, while the price decreases become smaller and significantly slower as one moves forward in the value chain. Both lags and asymmetric price transmission are present. The example also shows that bread prices increase far more than can be explained by the increase in the price of grain. Bread prices have, therefore, overreacted to the increase in the grain price.Farmers can move downstream in the value chain via their cooperatives and in this way contribute to the creation of improved price transmission, while at the same time, gain access to segments with higher margins and greater market power.
M3 - Article in proceedings
VL - 1
SP - 129
EP - 137
BT - Healthy agriculture for a healthy world
A2 - Watson, Heather
A2 - Lipari, Mathieu
A2 - Gendron, Sophie
A2 - Bouchard, Marie-Claude
A2 - Couture, Suzanne
A2 - Nadeau, Nathalie
PB - International Farm Management Association
CY - Québec
T2 - 20th International Farm Management Congress
Y2 - 12 July 2015 through 17 July 2015
ER -
ID: 141571190